Narrowing down market in Philadelphia Area

[Joseph Notte]

Hey BP Community!

I'm looking for some advice on narrowing down a target market and parameters for my first rental property in the Philadelphia area.

My buy box could look a lot of different ways. Generally, I'm looking for a small multifamily that I can (somewhat) slowly BRRR or keep and rent for a long time and add value over the years. I'm hoping to gain some insights from anyone experienced in the Philly area. I'm mostly just looking for a way to get started in the game and gain experience for the long term.

Unfortunately, a house hack is not an option for me.

I am 5 years into a mortgage on the house I live in, and have some money saved and great credit. I also have a unique piece to my financial situation, as I have a potential investment from a family member.

Are there any advantages/disadvantages to focusing within the city limits vs surrounding suburbs?

Is there a sweet spot in terms of up front capital in this market? House prices range significantly throughout different areas of the city and surrounding suburbs. If a certain range made the most sense, I could shoot for that direction. 

I'd love to connect with anyone in the area!

[William Rizer]

Hey Joseph! I'm in the Philadelphia area! I spent a good portion of my life in the city as well as the suburbs. Within city limits MF proprties are a lot less common than in other regions of the country. But youre best bets would be the Norristown area, Lansdale, and maybe parts of delco for a MF unit. Lower bucks county doesnt really have a ton of MF units either... your next best bet would be Jersey. Starting with Voorhees and then expand your search up and down the river front towns. 

As far as advantages/disadvantages of city limits vs suburbs... 

imo the best advantage of staying within certain neighborhoods in the city would be the ease of house hacking. But youre not into that anyway! Lol Not only is the clientel more willing to rent rooms the neighbors are much more use to and accepting of it. Out in the suburbs if you don't have your neighbors grace when it comes to house hacking and even rentals in some towns....its more work to schmooz them over so to speak. Tommy may know people at the township building, may wanna know why you didnt get that permit, complain about noise, etc... this usually goes away with time once you win them over but still...something to consider

Advantages of being out in the suburbs.... I think you're more likely to find long term tenants. Single moms and couples with kids are more likely to want good schools and stay in the same location than singles in there 20s looking for night life and close proximity to colleges, etc...

Also, some nonqm lenders have blacklisted parts if not the entire Philadelphia county...SOME lenders. not all or not even the majority. allegedly there has been appraisal fraud in brewerytown.... something to know if youre eyeing up that area but theres not a lot of MF units there anyway... 

Hope this helps! Feel free to reach out and pick my brain whenever! I love helping fellow investors! I also know a lot of good contractors in the area as well! Best of luck to you!!